TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1666
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....itted by the Ld. DR that DRP has applied RPT filter and it was found that related party transactions were more than 90%, therefore, this comparable was directed to be excluded. It was submitted that in the earlier years also, the same comparable was selected and it was not objected to by the assessee, therefore, in this year merely because related party transactions are more than 25%, the same cannot be allowed to be excluded. Further, the said comparable was excluded by the DRP also for the reason that it had a different accounting period and, therefore, cannot be included in the list of comparables. In this regard, it was submitted that merely because accounting year of the said company was ending on 30th November, the same cannot be excluded for this reason alone. Reliance was placed by him on the decision of the Tribunal in the case of Pangea3 & Legal Database Systems (P.) Ltd. v. ITO [2017] 79 taxmann.com 303 (Mum. - Trib.). It was submitted that though a comparable company may follow a different financial year but if financial data is available for all the quarters including January to March, then the same cannot be excluded from the list of comparables merely because the com....
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....r, the other handicap was that Pfizer Ltd's financial year ends on 30th November and not on 31st December and thus, availability of data of last quarter will not be sufficient. Thus, keeping in view all these difficulties, the DRP has rightly directed for exclusion of the same. 8. With regard to Celestial Labs Ltd. it was submitted by the ld. Counsel that the Tribunal in assesses own case for AY 2007-08 & 2008-09 has already taken a view in favour of the assessee and the same view should be applied. Our attention was drawn on the annual report of the said company to show that it was engaged in sales of products also and its primary business segments were software development and services. Further, the TPO has mentioned that functional profile of the assessee and the comparables are same as in early years. Thus, the view taken by the Tribunal in assessee's own case for AY 2007- 08 & 2008-09 should be followed in this year also. Thus, the order of the DRP should be upheld. 9. We have considered the submissions made by both the sides and also gone through the orders passed by the lower authorities and by the Tribunal for earlier years. We shall deal with both the comparables....
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....e case of respondent assessee. The same yardstick ought to have comparable. The submission on behalf of the Revenue that the mandate of Rule 10B of the Rules can be ignored as the difference is only of three months is without any basis. No such liberty is granted in terms of Rule 10B (4) of the Rules. (c) The findings of the Tribunal being on the basis of the unambiguous mandate of Rule 10B(4) of the Rules, question (iii) as proposed does not give rise to any substantial question of law. Thus, not entertained." Thus from the above it is clear that Hon'ble High Court has clearly laid down that in view of provisions of rules 10B(4) of Income Tax Rules, 1962, the accounting period of the comparable company should be same with that of the assessee company. There is no need to mention that the judgment of the Hon'ble Jurisdictional High Court is binding upon us. However, Ld. DR has relied upon the decision in the case of Pangea3 & Legal Database Systems (P.) Ltd. (supra) wherein it is claimed that the company having different accounting period can be included in the list of comparables. Perusal of the said decision clarifies that understanding of the Ld. DR is not comple....
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....on services for its customers. Celestial is engaged in implementing SAP for customers from initial planning, design and implementation to maintenance and ongoing optimization. Celestial helps the company align IT Solutions with business strategies. CelSanjivani Products: CelSanjivani is a part of Celestial Labs Ltd. an ISO 9001-2000 company working in this space of Bio- informatics and Gio-Technology. The goal is to become a primary market place for the herbal products providing quality products to the customers and industrial community. This is an Ayurvedic portal dedicated to B2B&C market with online live consulting with our Ayurvedic consultants. It provides excellent platform for trading of herbal products, with identification of raw herbs, scientific data, market & trade data, monographs, policy, laws, good manufacturing practices, DNA finger printing etc. It facilitates contacts with suppliers, manufacturers and dealers of herbal Pharma industry. The activities undertaken Celestial Labs are in the nature of providing host of IT related services and some trading activity which is not comparable to the Assessee. Hence it is clear that it is not comparable to the functional pr....
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....ated. By not resorting to such a process of making adjustment, the TPO has rendered this company as not qualifying for comparability. We therefore accept the plea of the Assessee in this regard.' 13. Our attention was also drawn on the order passed by the TPO wherein it has been mentioned that functional profile of the assessee as well as comparable companies are same as was there in the earlier years. Further, our attention was drawn on the financial statements of the said company wherein it has been mentioned in its P & L Account that it derives income from its sale of products and services. Further, Note No. 12 of Notes to Accounts mentions that the said company's primary business segment is software development & services. No other contradictory evidence is in the possession of the Ld. DR to contradict these facts. Therefore, we have no option but to follow the view taken by the Tribunal for AYs 2007-08 & 2008-09. Thus, we find that no interference is called for in the order of the DRP and, therefore, the same is upheld. Therefore, appeal filed by the revenue is hereby dismissed. 14. Now we shall take up assessee's appeal in ITA No. 2251/M/2014, filed on the follo....